Belgian start-up SN Brussels, which emerged with the Sabena regional fleet after the carrier's collapse, is adamant that it can reach break-even by the fourth quarter. But its relations with Virgin Express remain crucial to its future strategy.
Virgin Express, the low-fare operator which also operates from Brussels Zaventum, still codeshares with the start-up on five routes including London Heathrow. However, the deal runs out next March and the two carriers are in what SN Brussels chief executive Peter Davies describes as "preliminary discussions" about what to do next. Merger talks collapsed earlier this year, although Virgin Express has not closed the door.
"We are still only a few months old. We need a period of stability," says Davies. The airline only emerged late last year after Sabena's collapse, picking up the regional DAT operation with 26 Avro RJs and 6 older BAe 146s.
Davies makes it clear that he sees a series of bilateral agreements as the most probable way forward: "We are likely to pick and choose partners on certain routes. We will base our decision on what is good for passengers to and from Brussels. If that turns out to be one alliance, that is fine, but unlikely." SN Brussels is looking for partners in the North Atlantic, Far East and, to a lesser extent, the Middle East.
On the financial side, Davies expects the carrier to reach break-even by the October-December quarter of this year, with a 60% load factor and a 25% business class mix, compared with a load factor of around 50% in early June, of which 17-18% was business class. He says that yields have improved by 35% since the beginning of the year.
Unlike Swiss, which like SN Brussels was born out of a collapsed flag carrier, the Belgian operator is making no attempt to continue competing with Europe's major hubs. Instead, it is focusing on direct services and the African market, where it has recently begun services through a damp-lease agreement with Birdy Airlines, operated with three Airbus A330s.
Davies estimates that 7% of London passengers connect with African flights, and that 40% of African traffic comes from the Paris region. Davies rules out attempting to use Zaventum's relatively low delay figures to try something similar to the major hub-bypass role developed by Crossair at Basel. "Sabena carried a lot of transfer traffic. We've reversed that. We would be foolish to attempt other things and try and act clever," he says.
In the meantime, Davies admits there is "an awful lot to do". The Qualiflyer frequent flier programme, hit by the collapse of Swissair, is "under serious review" and the carrier is considering simplifying its pricing structure to take on the threat of Ryanair, which established a base at Brussels Charleroi, 60km (37 miles) south of the capital, last year.
Davies is aware of this development, but says he has "no intention of taking them on head to head", noting the different products on offer and the fact that Ryanair has to some extent created its own market.
Similarly, he notes that Virgin Express also has a single class and tends to fly longer sectors. He believes that the two can co-exist if they cannot reach agreement on further co-operation.
Source: Airline Business
